wife furure pensions?

johnaka

since april this year my wife work place stopped paying her ni contributions due to low wages.
she earns roughly £550 amonth.
she pays no tax either.
we've wrote to the works & pension folks, this was 3 weeks ago so far not heard any thing.
what she is concerned about how will this affect her future pension's.
has the law changed??
her work place is no help,all they say is she needs to contact the work/pension etc.
any ideas how this will affect her pension???

datostar

She will need 30 years worth of NI contributions over her working life to qualify for the full State pension. If her earnings are too low to incur NI contributions, she could make voluntary contributions (not sure what the current weekly rate is, but it'll all be on the gov.uk website) for as long as it takes to make the 30 years. If not, she would receive a percentage of the State pension based on whatever contributions she has made. If she is younger than you and your State pension starts before hers she would get 60% of the full rate based on your contributions, If she is older and her pension starts before yours then hers would rise to 60% when you start getting yours (assuming you have a full contributions record of your own).

molerat

If she earns more than £102 per wk / £442 per month she will receive NI credits.

datostar

molerat wrote: »

If she earns more than £102 per wk / £442 per month she will receive NI credits.

I haven't got the detailed knowledge to dream of contesting this, but HMRC do state :-

There are different circumstances in which you may be able to get credits. These are:

• when you are unemployed, or unable to work because you are ill, and claiming certain benefits - see the section 'If you've been claiming benefits'
• for the years in which you have your 16th, 17th and 18th birthdays (“starting credits”) - new awards of starting credits will no longer be made for anyone who attains, or who has attained the age of 16 on or after 6 April 2010)
• if you are on an approved training course
• when you are doing jury service
• if you are getting Statutory Adoption Pay, Statutory Maternity Pay, Statutory Sick Pay, Maternity Allowance or Working Tax Credit
• if you have been wrongly put in prison
• if you are a man aged 60 to 65 (however, from 6 April 2010 these credits are being phased out in line with the increase in women's State Pension age)
• if you are caring for a child or for someone who is sick or disabled
• if your spouse or civil partner is a member of Her Majesty's forces and you are accompanying them on an assignment outside the UK.

No mention of earnings at any level, but could the mention of Working Tax Credit be relevant?

sleepless_saver

molerat wrote: »

If she earns more than £102 per wk / £442 per month she will receive NI credits.

If she earns more than £102 per week/£442 a month then she has to pay NI contributions so should make sure this is being deducted from her pay. Only then will her NI record be credited.

If she earns too little to pay NI contributions and is likely to end up with less than 30 years worth (get a forecast), she can make voluntary contributions.

jem16

sleepless_saver wrote: »

If she earns more than £102 per week/£442 a month then she has to pay NI contributions so should make sure this is being deducted from her pay. Only then will her NI record be credited.

No she doesn't. Anyone earning approx £589pm or less pays no NI. For someone earning between £442 and £589 they pay no NI but are credited with NI credits as has already been said.

If she earns too little to pay NI contributions and is likely to end up with less than 30 years worth (get a forecast), she can make voluntary contributions.

On £550pm she does not need to pay voluntary contrbutions as she already has NI credits.

From HMRC website;

National Insurance

You can earn up to £139 a week (2011-12) before you pay any National Insurance contributions. This is known as the 'primary threshold'.

However, as long as you earn more than £102 a week (2011-12) you can still build up your entitlement to a State Pension and certain other benefits. This is known as the 'lower earnings limit'.

http://www.hmrc.gov.uk/working/intro/employed.htm

molerat

From http://www.hmrc.gov.uk/helpsheets/e12.pdf and http://www.hmrc.gov.uk/helpsheets/e12.pdf

Lower Earnings Limit (LEL)
This is the minimum level of earnings that an employee needs to qualify for benefits, such as State Pension and Jobseeker’s Allowance. If an employee’s earnings reach or exceed this level, but don’t exceed the Primary Threshold, they won’t pay NICs but will be treated as having paid them when claiming benefit. For this reason, you must keep details of an employee’s earnings at or above the LEL on a form P11 or equivalent record and report them at the end of the year on a form P14.

sleepless_saver

jem16 wrote: »

No she doesn't. Anyone earning £589 or less pays no NI. For someone earning between £442 and £589 they pay no NI but are credited with NI credits as has already been said.



On £550pm she does not need to pay voluntary contrbutions as she already has NI credits.

Sorry, you are quite right. I hadn't realised there was a band where credits were made without contribution.

johnaka

thanks for the replies.
on odd occasions she has paid NI contributions when she has done a bit of over time.
this explain it all. she will be pleased and relieved. thanks.

CLAPTON

johnaka wrote: »

thanks for the replies.
on odd occasions she has paid NI contributions when she has done a bit of over time.
this explain it all. she will be pleased and relieved. thanks.

has she asked for a pension forecast so she can see what she has already been credited with?
she can do it online

gadgetmind

CLAPTON wrote: »

a pension forecast so she can see what she has already been credited with?
she can do it online

Pensions forecasts are free, so we get shiny new ones every year! Its about the only freebie we'll ever get from HMG, so we're making the most of it.